Capital projects have followed a set routine over the last few decades. They have certain fixed, well-defined steps - Concept engineering, procurement, constructions and commissioning. This structure may have even necessary to control the project and keep it on time and budget.
However, there may be some organisational or structural flaws that may lead to cost overruns and overshooting the schedule. It may be due to
- Risk Normally, a committee decides on the risk intensity and the measures to be taken to mitigate the same. This takes time and slows down decision making.
- Control mechanisms can lead to inventory build-up which expands the schedule.
- Silos between departments create friction and inefficiencies. Various requirements for handoff between departments slow down progress and hampers productivity.
Gradually industries have started adopting the agile approach to overcome the organisational constraints. In an agile approach, self-organising teams including supplier and customers work together to create and refine solutions.
The Agile approach is rare in capital projects but companies that have adopted it have seen improved productivity and reduced costs. Industry leaders are using the agile approach to reimagine the completion of capital projects.
Agile approach in capital projects.
A traditional approach to capital projects is rigid, linear, each stage is managed by experts. An agile project is designed to be nimble with clear deliverables at project milestones and dynamic capabilities to react quickly to changes allowing projects to move through stages seamlessly.
The key characteristic is the empowered, cross-functional team to create accountability. Work is carried out in short sprints enabling teams to test out concepts and adjust ideas minimising risk of design or communications. this can be used across stages, across project life cycles to compress schedules and improve accountability while maintaining safety and quality.
Concept selection
In the concept stage, teams generate multiple ideas that are tested and the most attractive idea is selected. This requires a lot of effort to integrate into a cohesive design and more energy and time is invested to get the final design.
In the agile process, engineering teams can prioritise project features to get the right design. This would reduce the time spent developing full concepts and more time is spent on asking the right questions to get the right answer. this would also help value engineering to reduce the cost and compress the time required.
Engineering and procurement
Engineering teams, especially for small projects, are often a part-time assignment for professionals who work on large projects and this leads to bottlenecks when multiple commitments often delay attention to small projects.
Agile projects are smaller work packages where multiple teams ae convened to tackle specific challenges in sprints lasting one to two weeks. These sprints depend on the maturity of the project. At the beginning it would focus more on design and as the project matures the attention shifts to core engineering design. During construction, the sprints would focus on small work packages to enable detailed tracking and applying lessons learnt from previous packages. This requires a dynamic staffing model dedicating people to doing fewer projects at once. This reduces the complexity, reduce spending and compress schedules.
Construction, commissioning and turnover
The traditional approach is to managing the frontline to achieve preset milestones, apportioning the tasks to crews in a sequential manner. This approach optimises productivity but fails to consider the impact on the dependent tasks and inventory build-up.
Agile projects approach construction as a network of interconnected resources. They set up cross-functional teams and manage the flow of completed packages to system completion.
Getting started
Capital project companies have been slow in introducing Agie concepts into project delivery projects due to certain myths about agile. It was believed that agile methods do not provide for meetings or planning. However, the evidence has been the opposite.
It becomes clear that the agile approach is a transformative opportunity for the sector. To overcome the common challenges it is recommended that the EPC divisions implement agile on an MVP premise., identifying a few areas to address. This way people can see what agile can deliver. Early success will develop an appetite for more leading finally to an end-to-end application for an entire project.
It is important to realise that the agile approach may not work in every situation and must be tailored to a particular project. But Agile could transform the way capital projects are delivered.
Agile delivery of capital projects
Claire de Weerdt, Alistair Hamilton, Kevin Stokvis, Pasley Weeks
McK 2020/09
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